If you want to become a landlord but aren’t quite sure where to begin, this is the article for you. This will briefly cover the very basics for those looking to learn about being a landlord, so if you want to take the first step, make sure you are making a well informed decision.
Property is a commodity. That means that there is a reliable and steady source of income, and it will always be in demand, however it’s not straightforward and not always easy. Just like any business or investment strategy, there are things to learn.
Do you have enough capital to invest?
Property investment – alongside cash, bonds and shares – is one of the four most common types of investments. With property, there are two main potential ways to make a return. Renting, where you can earn an income by letting out property to tenants, and selling a property for profit, where you buy property and later sell it at a higher price. Both of these strategies require a property, and for some people this is the first major hurdle they face. You need to make sure that you have enough money to buy a house, but also that doing this doesn’t leave you in the red as there very well may be that there are other costs that you need to respect.
Invest in the property
Make sure that the property is up to scratch, modern, and well maintained. This may mean investing some money in the property, buying some new white goods, repairing any physical damage, and generally making sure that the house is somewhere that you would want to live in. It can seem very costly to buy a property and then have to put loads of extra money towards something you have just paid a lot for, but the rent money that an adequate property provides will reinflate your depleted cash stocks.
Think about your tenant base
Decide what your tenant-base will be, are you going to focus more on families, which would generally mean a single-let? Or are you going to aim to recruit as many tenants at once, in which case you’ll go for a house of multiple occupancy (HMO). Of course, there are benefits and problems to both types of let. Single-lets are less work, generally, as you only have one household to deal with. However, are will be more vulnerable if that one household decides to move out. HMOs mean that you have more tenants to deal with but a more steady stream of income if one tenant moves out or is late on their rental payments.
Have a look at the different insurance options
You will need landlord insurance. If you are confused as to the differences, your policy will be based on you owning the property but not living in it. This is different to a traditional policy where you are both living in and owning the property (or you have a mortgage). The risks that are involved for the bank or insurance provider is very different and there are features to landlord’s insurance that can massively help you as a landlord, such as Public Liability Insurance, Loss of Rent, Malicious damage, and Legal expenses.
Speak to some industry experts
As with any sensible investment, it helps to get some quality advice and some industry knowledge. One of the best ways to grow in any area is to learn from someone who has already started the journey and is further along than you. This is how you can find out what works and what doesn’t, without having to make the mistakes that others have made. Reading books is a convenient way to reference and search for information as well as being inspired by success that other property investors have seen.
Property rental, and property sales, are great ways of investing and making a quality income. Nick Fox, and the team, have opened and grown a business based on property, so here’s proof that it works! What’s more, we can help you. There loads of great Nick Fox books available where you can learn all about property and leasing – have a look at them today.
Nick Fox started his property investment career 10 years ago and his portfolio has grown to one of the largest in the UK. Nick now mainly focuses on HMOs (houses in multiple occupation) and works to help others achieve property success too. Visit here to find out how he can help you.
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